Working Papers (ARC) Titler

A Comparative Analysis of foreign and local firms in Indian Industries

Aggarwal, Aradhna(Frederiksberg, 2016)

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This study examines how inter-firm heterogeneities in technology modes and intensities are linked to ownership of firms in India, using a panel dataset of 2000 odd Bombay Stock Exchange listed firms for the period from 2003 to 2014 drawn from the PROWESS database of CMIE. For the analysis, foreign ownership is categorised according to the control exercisable by them as defined under the Companies’ Act of India. A comparative analysis of domestic and different categories of foreign firms was conducted at two time periods: the global boom period of 2004-2008 and post crisis period of 2008-2014. The propensity score matching (PSM) analysis reveals that the majority owned foreign companies spend less on R&D and more on technology transfers than their local counterparts. Overall, threshold equity holding and global conditions matter. A panel data regression analysis on matched sample confirms the findings and validates the PSM findings. A horizontal cluster analysis on 3-digit industry level data shows that foreign firms cluster in high technology industries.

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This paper examines recent debates about reproductive policy in Singapore by examining the responses of two different groups of women - women Members of Parliament and feminist activists. Women currently make up 10% of MPs in Singapore. Although this figure is low when compared to average rates of female representation globally, it is the highest level in Singapore since Independence. All these women are members of the ruling People’s Action Party (PAP) in power since 1959. While publicly supportive of the view of the PAP male elite, this group of women has introduced a level of critique into reproductive policy not previously seen by the Singapore public. Local women’s groups too have played a visible role in public debates about population policy. The feminist group, the Association of Women for Action and Research (AWARE) has had a long interest in reproductive policy issues and released its own position paper to address the government’s recent policy making. This paper examines the responses of these two groups of women towards the PAP’s pro-natalist stance. It explores the extent to which these women have challenged the PAP as well as the obstacles to an independent feminist voice on population matters
Keywords: Singapore, population policy, reproductive policy, total fertility rate, feminism, women in politics

When analysing modes of navigating cross-cultural business communities most IB studies employ an etic approach that delineates how ethnically owned companies thrive and manoeuvre in complex cross-cultural business environments. This approach implies employing theoretical models and empirical observations that from a methodological point of view identify a local entrepreneur either as an objectified agent or as an anonymous ‘other’ thus pointing towards the assumption that such an approach has its roots in an ethnocentric academic tradition. This article goes beyond an etic approach and introduces an emic approach in which it is the local entrepreneurs themselves, who provide the main bulk of data on why and how they position themselves in a cross-cultural business environment the way they do. The main objective of this study is thus to show how local entrepreneurs develop business strategies so as to navigate and grow their companies in a complex cross-cultural business environments. The discussion on local entrepreneurship begins by outlining a theoretical framework for how to approach emic studies and from there proceeds towards suggesting a methodological approach that is capable of providing the empirical data that supports a theoretical framework based on an emic approach. The focus in this paper is thus to excavate how local entrepreneurs manoeuvres in a multi-cultural business context by combining both an etic and emic approach.

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The paper addresses the importance of network trade between Malaysia and China and assesses the extent of product upgrading in components traded. The study brings to the fore the following. First, China is emerging as an important market for component imports relative to component exports. As such the increase in two-way flows of parts and components for further processing and development, implying a shift away from assembly-end operations, remains insignificant. Second, network trade appears to have improved the quality of exports (reflecting the ‘moving up of the value chain’) destined to China, but the gaps between the unit values of export and imports have narrowed in the recent past, implying less product development. network trade, two-way trade, unit values, relative unit values, product upgrading

The concept of transnationalism is characterised by an important contradiction. While it makes an important contribution to the literature on identity by focussing on the themes of hybridity and pluralism, when it discusses the issue of transnational capital, it falls into the trap of essentialising ethnicity. Transnational theorist argue that there exists a pan-ethnic unity among the Chinese diaspora that would enable this community to emerge as a new economic force globally. The case studies in this essay reveal, however, that transnational networks do not influence the way ethnic groups do business with co-ethnics in other countries. This study argues that there is significant competition among Chinese-owned enterprises, which explains the dynamism of these firms. There is also much evidence of inter-ethnic corporate ties involving Chinese firms. These findings bring into question the importance of common ethnic identity in transnational business transactions undertaken by the Chinese companies.
Keywords: Transnationalism, Chinese Identity, Networks, Enterprise Development.

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A Case of Danish Multinationals and their Subsidiaries in P.R. China and India

Worm, Verner; Xu, Xiaojun; Shinha, Jai b.P.(København, 2005)

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By drawing on a selective review of literature, we propose that the culture of Danish multinationals and transnational organizations interface with the Chinese and Indian societal and managerial cultures in order to create hybrid cultures in Danish subsidiaries in P. R. China and India. The hybrid culture moderates the relationships between the forms of knowledge and internationalization of multinationals on one hand and the transfer of knowledge on the other. It is postulated that stable cultural frames of the Danes and Chinese managers, both having stable cultural frame, will require long drawn efforts to overcome the cultural distance and transfer the various forms and levels of knowledge in the initial years of the subsidiaries. On the other hand, Indians’ style of switching their cultural frames will create less entry problems but more recurring problems once Danish multinationals will get going. Once the postulates are empirically validated, potential implications for strategic interventions are briefly discussed.
Keywords: Knowledge transfer, culture, MNCs.

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The recent Bo Xilai affair has created strains in the Chinese political system
and has intensified the power struggle concerning the new leadership
appointments due to take place at the 18th Party Congress. The pressure on
the political system is intensified by a number of social phenomena such as
increased fragmentation, vested interests, corruption, social unrest, increased
income and social inequalities and a de facto reform stop since 2009. Some
scholars believe that we now see the end of ‘resilient authoritarianism’ and
that China either will experience a political and social collapse or move
towards a democratic system. However, developments since 1989 show the
regime’s amazing ability to revitalize its organizational capabilities and regain
its Mandate of Heaven. It may be too early to declare the Party over.

This paper argues that the fluidity that permeates the contemporary international community is driven by especially political and economic globalisation, which has a huge impact of the relationship between the nation and the state. As the individual nation state is increasingly depending on the international community for its economic survival this dependency on the global has as a consequence that it rolls back aspects of national sovereignty thus opening up the national hinterland for further international influences. These developments initiate a process of disaggregating state and nation, meaning that a gradual disarticulation of the relationship between state and nation produces new societal spaces, which are contested by non-statist interest groups and transnational more or less deterritorialised ethnic affiliated groups and networks. The argument forwarded in this article is that the ethnic Chinese utilises these newly created spaces for setting up diasporic like networks thus providing substance for transnational ethnoscapes or nations without states.
Keywords: globalisation, nation state, diaspora, ethnicity, Chinese, Southeast Asia

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Two things characterize the ethnic Chinese overseas: their subjection to discrimination and their over-representation (relative to the local people in the place of destination) in self-employment and entrepreneurship (Chan Kwok-bun 2004:xiii).
Much has been written on ethnic Chinese firms in Southeast Asia. A major part of the scholarly attention has gone into trying to understand and explain business success. As such the debate has for a long time, in a rather dichotomizing way, been divided into capitalist (profit maximisation) and cultural (personal relationship) explanations as the main drivers for this so-called success. Since the late 1990s the debate has entered a new phase, sometimes referred to as the "revisionist mood‿ enhancing the deconstruction and de-mystification of ethic Chinese businesses. Interestingly enough the debate has been rather quiet on issues of identity and ethnic self-representation. This is where this paper tries to fill a gap. By focusing on the role and meaning of ethnicity and religion (as identity markers) in enterprise development, leadership and management styles, and decision-making and networking I hope to contribute to a better understanding of the significance of "being Chinese overseas‿ and "New-Born Christian‿ in entrepreneurial identity. Empirical case material on several new-born Christian ethnic Chinese entrepreneurs of small and medium sized companies in Indonesia shall be used to explore this delicate relationship. The overtly non-Christian socio-political domination and the contested citizenship position of ethnic Chinese in parts of the region shall be features of the necessary contextual discussion.
Keywords: Ethnic Chinese, Indonesia, Entrepreneurship, New Order, Chineseness.

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This paper draws inspiration from Edward Said’s orientalism, and examines how the three National Museums of Singapore – the Singapore History Museum, the Singapore Art Museum and the Asian Civilizations Museums – are orientalized. The process is mediated through the museums’ close links to tourism promotion in the city-state. The tourism authorities in Singapore have found that the city destination has become too modern and western for many tourists, and the destination has embarked on a campaign to make Singapore more oriental. The creation of the museums is one strategy to orientalize Singapore; these museums assert different layers of Singapore’s oriental identities. Each museum appropriates the tourist orientalist imagination in different ways. This paper argues that the orientalist imagination can be understood as a set of knowledge resources for the construction of local identities to enhance a destination’s uniqueness and attractiveness. Besides reviewing Said’s orientalism, this paper visits criticisms of the theory, within the context of the orientalization process of museums in Singapore.
Keywords: orientalism, Singapore Art Museum, Singapore History Museum, Asian Civilizations Museum, Singapore tourism.

Indian OFDI has increased and diversified substantially in the last 10 years. This paper uses quantile difference-in-difference measure to estimate home country effects of the OFDI decision of Indian corporate on their firm level characteristics reflected in various financial/non-financial ratios. Quantile coefficients inform us about differential effects of OFDI on different segments of the probability distributions of these firm characteristics and also change in within group inequality.
It is observed that in the Indian context, the ‘home’ effect of OFDI is a slow process and the true effect of OFDI is revealed as time progresses. Also the effects (dimension, intensity and significance level) of OFDI are not same across segments (top, median or bottom) of the distribution of the selected variables and effects are found to be mostly muted when they are analysed on the bases of mean of the distribution (i.e. general DiD effect). OFDI leads to (a) reduction of inequality of firms (b) improvement in R&D expense of firms except those firms with already relatively high expenditure (3rd quartile) (c) exports to sales initially improve for three years and then worsen for small firms (first quartile), however, for the mid-size firms (median) it worsens after one year and (d) median of operating ratio (expense/sales) as well as after tax profit margin (PAT/sales) worsened over the year.

This paper uses the structuralist framework of agriculture-industry synergy in an
economy to discuss the performance of the agricultural and industrial sectors in
India. The industry – agriculture relationship is argued to be integral to
economic development as the agriculture sector supplies raw materials, surplus
labour to the industrial sector and acts as a source of demand for industrial
goods. However, in India this relationship has been complex. This paper looks
at the supply side constraints in the agricultural sector and the demand side
constraints in the industrial sector to assess the poor development and growth
in the two sectors. It concludes that India has not followed the structuralist
pattern of sectoral development and poor agricultural growth has not been
conducive for demand led industrialization, adversely affecting factor markets
for both labour and land.

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The Port of Rotterdam is a typical European organisation that undertakes several activities towards China annually and has a clear understanding of what it has to offer to its Chinese counterparts, but does not always succeed in achieving rapport with those counterparts. This paper studies the identity constructs of the Port of Rotterdam in a selected number of Chinese contexts (central ministries, main ports, etc.). The methodology is narrative analysis using corpora of texts compiled for each context. The core theoretical principle1 is that identity is not a property, but a process of ongoing interaction. The identity of A can only be established in a particular context, by observing the interaction between A and parties in that context. A will thus obtain multiple identities in multiple contexts. The results can be used by the Port of Rotterdam to improve the effectiveness of its delegations to China.

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We argue, due to the conspicuous failure of Washington Consensus-guided
reforms in most part of the developing world in 1990s and the outbreak of the
current global financial crisis, Washington Consensus, as a general term of the
neoliberal free market economic thinking, has been withering. In the meantime,
Chinese economic model has gain wide recognition and praise worldwide.
Joshua C. Ramo coined the term of Beijing Consensus as an alternative
approach to economic development for developing nations. There has been hot
debate on the notion of Beijing Consensus. We argue even though there are
some problems in Ramo’s original definition of Beijing Consensus, we should
not reject this notion altogether. Instead, we should try to come up with better
conceptualizations of this term. In this paper, we sum up ten general principles
of the Chinese development model as our new definition of the Beijing
Consensus.

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China’s diplomacy is among the many accomplishments of China during the period of reform and opening up. The People’s Republic of China is emerging fully on to the world’s stage, and in a largely positive fashion. It now has both interests and a presence in parts of the world completely new to China—such as Latin America and the Middle East. Beijing has managed its relations well with the major world powers—United States, Russia, and the European Union. It has transformed its regional diplomacy in Asia, reasserted a role in Africa, and has become more active in multilateral organizations. Thirty years ago, at the outset of the “reform and opening” era, China acted hesitantly on the world stage, limiting itself largely to its united front tactics against Soviet “social imperialism.” Its diplomats were not very sophisticated and rarely left their embassies abroad. In the United Nations, China’s preferred medium of voting was to abstain (especially on sensitive issues). In short, China’s diplomacy was hesitant and not confident, inward-looking not outward looking, parochial and not sophisticated, reactive not proactive, and composed more of words than deeds. Today, these latter characterizations better describe China’s diplomacy.

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Taking into account a broad range of stakeholders who may affect or be affected by corporate action, the perspective of Corporate Social Responsibility (CSR) carries the promise of a win-win situation for all. CSR in China is highly topical, as the country is integrating into the supply chains of the major global players, but the ideals of CSR are a far cry from the realities of production in "the workshop of the world". In this paper I will discuss key issues relating to the process of adapting CSR into the Chinese context. I will focus on the position of the PRC political leadership. I argue that the leadership seems to pursue an agenda of submerging CSR under the control of the Party-State and conceptualizing CSR by reference to a blend of an eclectic interpretation of Western European welfare models and CSR conceptions with an eclectic interpretation of Chinese tradition and political culture. As a result, CSR in China lacks the element of multi-stakeholder dialogue, which is commonly recognized as the core element of CSR in Western countries.
Keywords: CSR, China, Labour issue, MNCE, NGO, Politic change.

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The role of equity in the transition from egalitarianism to capitalism

Rutten, Koen(Frederiksberg, 2010)

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The ‘Scientific Development Concept’, promulgated by Hu Jintao in 2007 articulated the increased eminence of social development in official ideology. The shift from political and economic objectives towards social factors can be explained by growing concerns over the current negative externalities of China’s economic growth, the long and midterm sustainability of its economic development model and the implications thereof for social stability and political legitimacy. An immediate priority has been to formulate and implement a response to mitigate the disruptive effects of the transition to a market economy. Such a response must cover a wide array of social issues, ranging from provision of health, education and infrastructure, pension to unemployment insurance and poverty alleviation. The welfare issue is characterized by high degrees of complexity and interdependency between endogenous factors and exogenous political and economic variables. Improvements are further confounded by the high decentralization of administration, regional disparities and the sheer size of operations. Although progress has been made on most fronts, it remains to be seen whether recent initiatives will prove sufficient to meet China’s social challenges. In this paper, I provide a summary of the academic literature on post-reform development of the welfare system. I will give an overview of its most salient problems, initiatives and their preliminary outcomes. Finally, I will present some concluding remarks and provide suggestions for future research.

This paper analyses the historical ‘direct’ soft power of American missionary universities in China and their ‘reverse’ soft power towards American society until their nationalization in the early 1950s. The paper also addresses the soft power of the legacies of these historical universities. This analysis is based on the cases of St. John’s University, Yale-in-China and Yenching University.
American missionary universities were founded with the clear ‘direct’ soft power purpose of attracting the Chinese ‘other’ to Christianity. However, soft power resources often have unintended behavioral consequences and a particularly interesting one is ‘reverse’ soft power: Where the intended object society of soft power influences the originator society of soft power, for example, through education and advocacy. American missionary universities exercised substantial soft power both toward the Chinese host society and toward the American society. The institutions in China also left institutional legacies at American—and Canadian—universities which continue to hold soft power in the relationship between American and Chinese society. The extent and limitation of this bidirectional soft power can be discerned from what attracted different actors to these universities and what those and other actors rejected about these universities; this is based on a detailed analysis of the relations between the universities and different public and private actors in the host society and the society of origin. These relations were characterized by the role of the universities as bridges between host society and society of origin carrying much information between societies, raising awareness and interest about the other society, moving elite-level human resources back and forth and raising large financial resources in the USA for education and research in China.

This article examines the role of the state in development, and the question of poverty, inequality and regional disparity in selected ASEAN countries Malaysia, Indonesia, Thailand and the Philippines in the context of both internal and external pressures faced by the state and how its responds to them. This article examines the historical context of the socioeconomic transformation, the current state of development, the high level of poverty in these countries (except Malaysia), the pervasive inequality and regional disparity, the various internal and external pressures exerted on the state and the latter’s response to them. The article concludes by highlighting the importance of appropriate state policies for inclusive development and the role of civil society to exert pressure to ensure states perform such tasks. It argues that these issues are a result of state policies and institutional arrangements, and that to resolve them, appropriate inclusive policies need to be crafted and effectively implemented. The state has the autonomy and space to devise such policies but it is dependent on the political will of state actors and the role of civil society in engaging with the state to effect such reforms to address poverty, inequality and regional disparity effectively.

Over the past decade, the Government of Malaysia has become increasing aware of the significant contribution of small medium enterprises (SMEs) to the national economy. A number of Government programmes and incentives were offered to the SMEs in the past years but with limited impact. This lecture touches on the nature and contribution of the Malaysian SMEs in the first five years of the 21st century. An attempt was made to identify the success factors and weaknesses of SMEs from official reports of Government agencies, and findings of research studies on the subject. Recognising the challenges posed by globalisation and trade liberalisation on the Malaysian SMEs, the Government revamped its policies, programmes, incentives, and approaches which are currently implemented in the Ninth Malaysian Plan and the Third Industrial Master Plan. The objective is to enhance the SMEs’ capacity and capabilities through continuous product development, knowledge and technology acquisition to empower them to compete with other global players offering high quality products and services at competitive prices.